Long & Short of Markets: Jhunjhunwala’s portfolio full of multibaggers; how to avoid value traps

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Long & Short of Markets: Jhunjhunwala's portfolio full of multibaggers; how to avoid value traps


Looking back to when India went under lockdown for the first time, the year went-by saw one of the fastest crashes and recovery in the financial market. Some of the gravity defying rallies in the market lacked any financial logic. Read about Rakesh Jhunjhunwala’s all star portfolio, RBI’s experiment with negative bond yields and how to avoid value traps in this weekend’s edition of ‘Long & Short of Markets’.

RJ’s basket of golden eggs
In the trading world, the ideal probability to win or lose a stock bet is 50 per cent. And when 50 per cent of all the bets in a portfolio sees success, then it is considered extraordinary. Rakesh Jhunjhunwala has pocketed a basket of golden bets in this term as 56.41 per cent of his bets have doubled in the pandemic affected year gone by. Take a look at his multibagger portfolio.
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Defying financial logic
You thought companies with strong fundamentals, great cash flow and market share hold the secret sauce for winning a stock bet? Data shows this financial logic didn’t hold true for the vaccine-led rally. Here is more on why penny stocks led the rally until cyclicals and value stocks picked up recently.
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RBI’s tango with lower yields
RBI’s desperate measures to keep yields lower as it battles short sellers is passive-aggressive, passionate and displays superiority like a dramatic tango dance. In it’s latest measures to keep yields in check, RBI brought in the big guns as it introduced negative bond yields to counter the shorting spree on bonds which may push yields higher, increasing the cost of borrowing for the government. Here is more on how negative bond yields work.
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Playing the EV theme
As prospects for EVs in India is soon are improving, it’s hard to find companies to play the theme, especially in the Indian market with no clear winner, except for companies like Tesla which are not listed in India. Andrew Holland of Avendus Capital says it’s better to compete with auto parts manufacturers for EVs as of now. Here’s more on how to approach EV theme as an investor.
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Find booster to avoid value trap
At a time when cyclicals and value themes are outperforming growth theme, Sridhar Sivaram of Enam Holding warns that buying value stocks without a booster may lead you into a value trap. “Always look for an earnings growth kicker in value stocks.” Here is more on how not to fall for value traps.
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